What bone constraints should I use?
The one you need is the Transformation constraint. It allows you to map values from one transformation type (location, rotation or scale) of a bone to a transformation type of the target bone. This mapping can also switch X/Y/Z channels around and set appropriate limits and ranges.
If your case you would want to map the vertical location of the pan bone (in local space probably) to the rotation of your indication bone around the appropriate axis (probably also in local space).